The startling figure was suggested yesterday by the chief US economist at Goldman Sachs, Jan Hatzius, who said that an estimated $400bn (£290bn) in losses on mortgages would be magnified as lenders reacted to stay within their solvency requirements.

“Even a $400bn loss does not look all that large compared to the vast size of the US financial markets, and one sometimes hears that it is just equivalent to one bad day in the stock market,” Mr Hatzius told clients. “But this analogy is wrong. There is a big difference between stock market losses, which are mostly borne by long-only investors, and mortgage credit losses, which are mostly borne by leveraged investors such as banks, broker-dealers, hedge funds, and government-sponsored enterprises.”

JP Morgan topped the list with total assets under management of $44.7 billion dollars. JP Morgan has a number of hedge funds under its management, including JP Morgan Asset Management and Highbridge Capital Management. JP Morgan topped the list even though they suffered from a loss of $8.5 billion in assets, mainly due to redemptions and some losses in their statistical arbitrage fund.

Bridgewater Associates was second on the list with total assets under management of $36 billion dollars. They were almost tied with Farallon Capital Management, who boasted a similar figure in total assets.

Renaissance Technologies came in fourth place with $34 billion dollars, and Och-Ziff Capital Management, the publicly traded hedge fund firm, was in fifth place with $33.2 billion in assets. DE Shaw and Goldman Sachs Asset Management both fell in 2007 due to their exposure to quant funds, and finished up in sixth and seventh place respectively.

Paulson and Company also soared into the top ten due to their aggressive bets against the subprime mortgage market.

Many companies that had significant exposure to quant funds managed to recover in the latter part of 2007. The recover continues in 2008, and it will be interesting to see if firms such as Goldman Sachs can start scaling their way back up the list.